Press reports on “Utilising Indian Market Access Offer through Promotion of Trade Facilitation,” organised by CPD at Lakeshore Hotel, Dhaka on 22 April 2014.
For all press reports published on Wednesday, 23 April 2014, click here [pdf ~ 4.62 MB]
Published in Dhaka Tribune
Bangladesh hardly benefited from duty-free Indian market, trade experts say
Tribune Report
To enhance exports to the market, Bangladesh needs to diversify its export basket
Bangladesh has failed to take advantage of the duty-free access to Indian market due to reasons, including lack of leadership, coordination, infrastructure bottlenecks and cumbersome export procedure, trade analysts said yesterday.
To enhance exports to the market, Bangladesh needs to diversify its export basket, they said.
They came up with the observation at a dialogue titled “Utilising Indian Market Access Offer Through Promotion of Trade Facilitation,” organised by Centre for Policy Dialogue (CPD) in Dhaka yesterday, presided over by CPD Chairman Professor Rehman Sobhan. India allowed all but 25 Bangladeshi products duty-free in their market in 2011.
CPD Distinguished Fellow Debapriya Bhattacharya said though volume of trade between the two countries increased over the years, proportionately it declined.
He said infrastructure, lack of port facilities, non-tariff barriers and difficult export procedure are the bottlenecks for increasing trade between the two countries. “But the bottom line is that lack of leadership, initiative and coordination are the stumbling block to boost export to India,” he said.
He said India’s credit was used only to buy truck instead of developing infrastructure, which lacks aims.
State Minister for Foreign Affairs Md Shahriar Alam said to facilitate trade, Bangladesh is negotiating with India to open deputy high commission in Gauhati.
“There is a multi-tier mechanism between Bangladesh and India for enhancement of bilateral trade. The engagement is also intense.”
A very positive development has been there for operationalsing the standard operating procedure signed between the two sides in August 2010, allowing trucks carrying bilateral cargo to cross up to 200 metres beyond the zero line.
As regards port restriction, Indian side maintains that their port restrictions affect very few Bangladesh items.
Abdul Matlub Ahmad, former president of India-Bangladesh Chamber of Commerce and Industry, said the major problem is lack of exportable products. “We need exportable products having quality and competitive price.”
“We invite Indian companies with reputed brand to invest and export back to India, which help reduce the trade gap. We also need to assure industrial plots, gas and electricity to the Indian entrepreneurs.”
Farooq Sobhan, President of Bangladesh Enterprise Institute (BEI) said: “We need to produce new products targeting India.”
Direct flight between Dhaka and Gauhati, trade office, deputy high commission are needed to boost trade, as Bangladeshi products have huge demand in the North-East region of India, he said.
Former commerce secretary Suhel Ahmed Chowdhury said one country is operating two system – one for the North-East region and another for other parts of India.
He said one importer has to go to Kolkata to open LC, which is one of the bottlenecks for increasing export to India.
Former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Abdul Awal Mintoo said: “We have still to go a long way. We don’t have enough exportable products, causing yawning trade gap between the two nations.”
He said though infrastructure and non-tariff barriers are the barriers to boost trade, there is also political problem.
CPD Executive Director Professor Mustafizur Rahman in his study report identified four bottlenecks against export increase to India are infrastructure-related bottlenecks, inadequate customs and port facilities, non-tariff barriers and cumbersome export procedures and documentation.
He said Bangladesh’s export to India was only 0.13% of India’s global import while India accounted for 16% of Bangladesh’s total global import.
An interesting feature of Bangladesh’s export to India is that whilst the ratio of Bangladesh’s global export of RMG and non-RMG items was 80:20, in case of India this was the opposite at about 30:70.
This alludes to the potential for Bangladesh’s export diversification in the Indian market, using duty-free access to India.
North-East region of India remain a market with a significant export potential for Bangladesh because of its close proximity to Bangladesh and the high cost of trade transaction with the rest of India.
Published in The Financial Express
Remove bottlenecks for export to India
CPD Dialogue told
FE Report
Speakers at a discussion emphasised Tuesday the need for removing bottlenecks that hinder boosting Bangladesh’s exports to India even after offering duty free market access by the neighbour.
They also stressed the need for expansion of export basket through product diversification as Bangladesh’s exportables are very small in number.
The Centre for Policy Dialogue (CPD), a private think tank organised the dialogue titled ‘Utilising Indian Market Access Offer through Promotion of Trade Facilitation’ at a city hotel with its chairman Prof Rehman Sobhan in the chair. Minister, trade leaders and secretaries to government attended the programme.
State Minister for Foreign Affairs Shahriar Alam said the government has been working for trade facilitation to raise export to India utilising the market access facility it offered to the least developed countries.
He said steps have been taken to ensure smooth connectivity for which the two neighbours are in discussion to start plying of container train alongside raising number of passenger trains to four from existing two between the two countries.
Mr Alam said opening of a deputy high commission office in Guahati and another consulate office at Chennai are under process to facilitate trade with India.
“There is nothing to be worried much about the high trade imbalance with India. The raw material of US$20 billion apparel industry comes from there. The apparel sector may not be able to fetch such a big amount of foreign currency had the raw materials were not imported from there. So, all trade deficits are not bad,” he said.
However, he said, “Despite all the political elements are there in case of Bangladesh-India relations, we have to carry forward trade and investment dialogue to expand bilateral trade.”
Addressing as guest of honour, former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Abdul Awal Mintoo, urged businessmen to seize the opportunity of duty free market access and export more goods to India.
Acknowledging various bottlenecks including lack of infrastructure and existence of non-tariff and para-tariff barriers he said the number of exportable products have to be raised to boost export.
Former president of India-Bangladesh Chamber of Commerce and Industry Abdul Matlub Ahmad urged the government to remove the infrastructure bottlenecks to raise export to India.
Regarding Indian investment to Bangladesh he said investors need to be provided land, gas, and electricity at reasonable price.
Executive director of CPD Prof Mustafizur Rahman in his keynote presentation emphasised the need for deepening trade investment, transport, and people to people connectivity between the two countries.
He identified infrastructure-related bottlenecks, inadequate customs and port facilities, non-tariff barriers and cumbersome export procedures and documentation as barriers to raise export to India.
Mustafizur Rahman suggested introduction of single window facilities, electronic data interchange between land customs stations, establishing automated systems for cargo processing and building dedicated bypass roads and multi-lanes to reduce congestion at land customs stations, among others.
FBCCI leader Manzur Ahmed, former commerce secretary Sohel Ahmed, CPD distinguished fellow Debapriya Bhattacharya also spoke on the occasion.
Published in The Daily Star
Product diversity holds key to wider access to Indian markets: CPD
Star Business Report
The government should take full advantage of the duty-free market access to the Indian market by exploring new areas instead of relying on traditional products, a new study of the Centre for Policy Dialogue suggests.
In the past, Bangladesh’s major exports to India included raw jute, jute items, fertiliser and frozen foods.
This composition has changed over time, the CPD said.
Now Bangladesh’s major exports to the Indian market include jute, home textile, food items, cotton and woven products.
The CPD said Bangladesh should explore opportunities in the areas such as bicycles, optical elements, leather items, handbags, footwear, outer soles and sleeping bags.
The suggestion came at a dialogue on “India’s market access offer: realising potential opportunities through enhanced trade facilitation” at Lakeshore Hotel in Dhaka yesterday.
CPD Executive Director Mustafizur Rahman said there are some items that Bangladesh exports to the global market but not to India.
“At the same time, India imports some items from the global market, but does not take those from Bangladesh.”
Taking advantage of the duty-free access to the Indian market, Bangladesh could potentially increase export of these items to India, he said.
Imports from India went up from $1,358 million in fiscal 2003 to $4,740 million in fiscal 2013, with a three-fold rise in a decade, according to the study co-authored by Rahman and CPD Senior Research Associate Khaleda Akhter.
The study also said Bangladesh’s exports to India have increased from less than $100 million in fiscal 2003 to about $563 million in 2013, a jump of almost six-fold within a span of 10 years.
The trade deficit stood at $4,176 million in 2013.
But the CPD study said the bilateral trade deficit should not be a major concern as many of the imported inputs from India go into Bangladesh’s export oriented industries.
Backing CPD’s suggestion, Shahriar Alam, state minister for foreign affairs, said Bangladesh should not worry about the trade imbalance.
“If we did not have Indian cotton it would have been tough for the country to increase its exports from $10 billion to $25 billion in recent years.”
He said the government plans to open office of deputy high commissioner in Guwahati and Chennai to boost trade.
“We are awaiting permission from the Indian government,” he said, adding that there are also some development on opening a second rail route and a container train service between the two countries.
Rehman Sobhan, chairman of the CPD, said the duty-free access would have been hugely beneficial to Bangladesh and the Indo-Bangla relations had it been granted three decades ago.
“But the ball is now in the court of Bangladesh and the business community to exploit the opportunity,” he said.
He, however, said he does not see any long queues of businesses to increase Bangladesh’s exports to India, although a new window of opportunity has opened up.
Sobhan said the rest of the world is exporting $350 billion worth of products and goods to India, where Bangladesh’s share is only $500 million.
“Countries like Vietnam are exporting significantly to India in the same trade framework Bangladesh operates in,” he said.
He said Bangladesh’s entrepreneurs showed sheer strength in keeping the healthy pace of exports in the face of global economic crisis and political unrest at home.
“Why was the strength not directed to the Indian market?” he asked.
The CPD said exporting more to India should help Bangladesh not only in terms of market diversification but also product diversification.
The study identified four areas — infrastructure bottlenecks, inadequate customs and port facilities, non-tariff barriers and cumbersome export procedures — where improvements are needed to boost Bangladesh’s trade potential.
The study blamed a lack of appropriate trade-transaction friendly facilities at the customs and port points, which facilitate 90 percent trade between the two countries, for low exports to the Indian market.
The study suggested a mutual recognition agreement so all testing, certification and licensing are harmonised and standardised for both the countries and are mutually accepted.
Trade facilitation, as a cross-cutting area, will play a critically important role in enhancing Bangladesh’s export opportunities in the Indian market by taking advantage of the duty-free market access, Rahman said.
He said, to boost connectivity Bangladesh will have to work on four areas: trade connectivity, investment connectivity, transport links and people-to-people contact.
Rahman also said, as trade facilitation measures Bangladesh will have to reduce export and trade transaction cost, bring down import costs and stimulate Indian investment in Bangladesh.
Debapriya Bhattacharya, distinguished fellow of CPD, said Bangladesh does not lack knowledge and experience when it comes to exploring trade opportunities.
“Our problem lies with a lack of initiatives, steps in right direction and a lack of leadership from the government side,” he said.
The economist raised question why the $1 billion Indian credit could not be used to remove the already identified barriers that are standing in the way of boosting trade between the two countries.
Bijay Selvaraj, first secretary (commercial) at Indian high commission in Dhaka, said the two countries will have to look at a multi-modal transport system instead of relying on land ports to transport goods.
“Bangladesh also needs to look at the whole of India as its market to take trade relations further, instead of the north-eastern states where the population is only 40 million,” he said.
Abdul Awal Mintoo, a former president of the Federation of Bangladesh Chambers of Commerce and Industry, said there is no alternative to diversifying products.
Published in The Independent
CPD identifies 4 obstacles to Indo-Bangla trade
Staff Reporter
Inadequate infrastructure, procedural bottlenecks, non-tariff barriers are major obstacles
Centre for Policy Dialogue (CPD) yesterday identified four major bottlenecks hindering the trade facilitation between Bangladesh and the neighbouring India although India allows duty-free access most of Bangladeshi products. Inadequate infrastructures, lack of adequate customs and port facilities, non-tariff barriers and cumbersome export procedures of documentation are the major hurdles hindering the trade between the two countries.
To remove the obstacles and facilitate the bilateral trade, the CPD recommended for introducing single window facilities at land ports, electronic database at custom stations (LCSs) and automated cargo processing system
Prof Mustafizur Rahman, executive director of CPD, came up with the recommendations at a dialogue on “Utilising Indian Market Access Offer through Promotion of Trade Facilitation” at a city hotel yesterday. Prof Rehman Sobhan, chairman of CPD, presided over the dialogue while Md Shahrial Alam, state minister for Ministry of Foreign Affairs, attended the event as the chief guest.
The dialogue was attended, among others, by Abdul Awal Mintoo, former president of the Federation of Bangladesh Chambers of Commerce and Industry, Abdul Matlub Ahmad, president of India-Bangladesh Chamber of Commerce and Industry (IBCCI), and Dr Debapriya Bhattacharya, distinguished fellow of CPD.
The CPD also underscored the need for building dedicated bypass roads and multi-lanes to reduce congestion at LCSs, expanding areas at LCSs with appropriate parking and warehousing facilities, establishing testing facilities at major border points, standardization and harmonization of customs procedures, signing mutual recognition agreements with commensurate strengthening of the BSTI and coordinating development of LCSs on both sides of the two country’s border.
Any investment to develop the land ports will be a worthy investment, said Prof Mustafizur Rahman adding that it will help both the countries’ exporters, importers and customers to a large scale.
Besides, there are many items which Bangladesh exports to the global market except India likewise there are many items which India imports from the global market except Bangladesh, he said attributing the reasons mainly to the obstacles.
Taking advantage of the duty free market access to Indian, Bangladesh could potentially increase the export of these items to India, he pointed out.
Dwelling on the non-tariff barriers in Indian side, he said, “Although the National Accreditation Board for Testing and Calibration Laboratories of India has accredited BSTI for 25 exportable items of Bangladesh, no official document are sent to the border points and Indian customs officials are not accepting the certificate from BSTI for those commodities.”
Besides, the Bangladeshi exporters have to pay customs surcharges and other duties, including basic duty of customs, additional duty, countervailing duty and so on, he said.
To increase the country’s export to India by taking the opportunity of duty free market access of Bangladesh products to India, Prof Mustafizur Rahman also stressed the need for attracting Indian investment in Bangladesh potential sectors so that the investors could reap the benefit of zero duty facilities in Indian market.
“If we can ensure trade facilitation and develop the land ports and provide adequate infrastructure, we will be able to call forth the benefits of DF market access to the Indian market,” he pointed out.
CPD fellow Dr Debapriya Bhattacharya said, “Although we do not have lack of resources, experience and knowledge, we fail to increase the export to India by utilising the zero duty facility mainly due to lack of initiatives and proper coordination among government bodies and stakeholders.”
IBCCI president Abdul Matlub Ahmad said “We need exportable products which have brand popularity, better quality and competitive pricing to increase the exports to India through taking the benefits of zero duty in the Indian market.”
“Unless we assure the Indian investors of smooth supply of gas and electricity and lands at affordable price, we will miss the train of Indian investors,” the IBCCI president added.
Export baskets of Bangladesh are very narrow, said former FBCCI president Abdul Awal Mintoo underscoring the need for export diversification and alluring foreign direct investment (FDI) in the country’s potential sectors.
To attract FDI and increase exports to India, Mintoo stressed the need for political stability, business-friendly atmosphere, adequate infrastructure and smooth supply of power and electricity.
Published in The Daily Observer
Bring Indian investments to boost exports: CPD
bdnews24.com
An economic think tank has suggested bringing in Indian investments to increase Bangladeshi exports to that country.
The Centre for Policy Dialogue (CPD) organised a discussion on trade between India and Bangladesh on Tuesday.
The institution also recommended infrastructural improvements in the land ports and removing India’s non-tariff barriers on export to improve trade.
State Minister for Foreign Affairs Shahriar Alam was the chief guest at the discussion.
CPD Executive Director Mostafizur Rahman, who presented the keynote paper, said luring in Indian investments to the sectors which export to the country was crucial for facilitating trade between the countries.
“Trade barriers have to be removed if we want to attract this investment,” he said.
But he said India’s duty-free access of ready-made garment (RMG) products for Bangladesh would not have a big impact on export.
“Bangladesh will also have to take some major steps to relax trade barriers.”
Rahman said 90 per cent of the trade with India was done through land ports.
“We have not done the kind of development required to handle such a large flow of trade,” he said.
He recommended improvement of land port infrastructures, increasing warehouse facilities, setting up cold storages and laboratories and digitalisation of import-export documents.
“These things will reduce the costs of trade and increase Bangladesh’s trade capacity in the Indian market. These things are also important for import, because they affect the costs of both,” he said.
CPD Honourary Fellow Debapriya Bhattacharya said Bangladesh had been unable to make use of the facilities given by India because of lack of effort, continuity and coordination within the government.
Bangladeshi businesses need 21 pieces of documentation to export to the European Union while for India they need 75.
Former FBCCI president Abdul Awal Mintoo said Bangladesh would have to diversify its export goods and improve their quality to capture the market.
India-Bangladesh Chamber of Commerce and Industries President Abdul Matlub Ahmad said many Indian investors wanted to come to Bangladesh but uncertainty over getting land, gas and power connections held them back.
Shahriar Alam said the government had taken several initiatives to bolster trade with India, including the ongoing effort to open two deputy high commissions, one at Guwahati in Assam and another in Chennai.
“These two deputy high commissions are awaiting Indian government approval,” he said.
“Also, we are trying to launch two more sets of trains and container trains. Hopefully in the future more initiatives will be taken to increase communications with India, which will benefit both the countries in trade and other issues,” he said.
Published in New Age
Lack of govt effort holds back exports to India: economists
Staff Correspondent
Bangladesh’s export to India has stagnated as the country is failing to reap the benefit of duty-free market access due to lack of government effort and coordination, said economists in a dialogue on Tuesday.
They said non-tariff barriers like certification and accreditation and cumbersome procedure and documentation put by India and local infrastructure crisis, inadequate custom and port facility had long been persisting because of lack of government effort.
‘I believe there is big problems of willingness and coordination of the government as we know and have been talking about these problems for long but still there is no solution,’ said Centre for Policy Dialogue distinguished fellow Debapriya Bhattacharya.
The CPD organised the dialogue on ‘Taking Advantage of Indian Market Access Initiative Through Promotion of Trade Facilitation’ at a city hotel.
Debapriya also questioned why the government was spending India’s $1-billion loan mostly to purchase vehicles from India.
‘We have these long standing problems of infrastructure and non-tariff barriers and the government is not spending the money on that,’ he said.
CPD chairman Rehman Sobhan said the government lacked effort to explore the Indian market for Bangladeshi businessmen.
‘I will give the government a B-mark for their effort on this. For the businessmen this will be even lower,’ he said.
Debapriya said the export to India showed progress immediately after the duty-free access in 2011 but now witnessing stagnancy.
‘We need to check whether that periodic boost was because of duty-free access or there was any other reason behind that,’ he said.
CPD executive director Mustafizur Rahman, in his keynote presentation, said that although export to India increased but the Bangladeshi market share decreased in recent years.
‘Bangladesh’s export to India was 0.16 per cent of India’s global export in 2000 which came down to 0.13 per cent in 2013,’ he said.
‘On the other hand, India’s share to Bangladeshi import was 9.91 per cent in 2000 which increased to 16.31 per cent in 2013.’
Mustafiz said the non-tariff barrier in India was also very high despite the duty-free access.
‘Even some of the certification or testing requirement in India is not seen when we export to the USA or to the European Union,’ he said.
‘If we talk about cement then we can see that it takes about 2-3 years to receive the initial permission to Indian market,’ Mustafiz said.
Although India has accredited 25 export items, the Indian custom officials are not accepting the certification of the Bangladesh Standard and Testing Institute of those commodities, he said.
Former commerce secretary Sohel Ahmed said Bangladesh had started developing the land ports earlier than India.
‘Even now, the businessmen of North East India cannot open LC for importing from Bangladesh unless they come to Kolkata,’ he said.
India-Bangladesh Chamber of Commerce and Industry president Abdul Matlub Ahmad said Bangladesh lacked exportable items to the Indian market.
‘And when we try to bring the Indian investment the government could not provide electricity, gas and land for setting up the industry,’ he said.
Former Federation of Bangladesh Chambers of Commerce and Industry president Abdul Awal Mintoo said Bangladesh should also explore the Indian market for tourism and education beside the regular products.
‘We have problems at our end which we need to resolve and also India need to enhance its cooperation,’ he said.
State-minister for foreign affairs Shahriar Alam said that the government was working very hard to resolve the problems mentioned in the dialogue.
‘We will be opening deputy high commission-level office in Gauhati and some other destination. We also signed an agreement use 200 meters of the Indian border to reduce the congestion in our land ports,’ he said.